Panasonic to boost Li-ion battery output in China; looking for reductions in manufacturing expenses

The Nikkei reports that Panasonic Corp. will ramping up lithium-ion battery output in lower-cost China to reduce manufacturing expenses as much as 30%.

Panasonic hopes to retain the top position in the global market through cost cuts. Japanese companies once enjoyed an edge in development and mass production of these batteries, which are used to power mobile phones, laptop computers and other products. But with South Korean rivals now quickly catching up, Panasonic has decided to rely more on Chinese production as a way to stay on top.

Panasonic and Sanyo Electric Co., which became a 100% unit on April 1, had a combined 26% share of the worldwide lithium ion battery market in 2010. Panasonic plans to invest 20–30 billion yen [US$244–366 million] through 2012 to lift Chinese output by constructing a new plant and upgrading existing facilities there.

Panasonic currently has an output capacity of 120 million units per month, of which 80-90% are produced in Japan and the rest in China. Panasonic hopes to lift Chinas share to around 50% by 2015, according to the report. It aims to roughly triple sales of lithium ion batteries, including those for automobiles, from the fiscal 2009 level to 1 trillion yen (US$12.2 billion).

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